It’s moving time again, unfortunately. You’d like to stay in Brooklyn, but mostly the room just needs to be affordable. A curious listing beckons from the Craigslist apartments-for-rent page: $600 per month in Brooklyn Heights? It turns out to be in the prettiest part of the neighborhood, near the intersection of Cranberry and Henry Streets. The photo doesn’t show you anything resembling a room; instead, there’s a large boxy structure sectioned into four cubbies, each furnished with a thin mattress, a small bedside shelf, and a light source. They evoke extra-comfy mortuary drawers or a DIY version of Japan’s capsule hotels.
The post directs you to a website that promises “early access to our places.” Sign up and you get a response casting you as an urban forty-niner: “Heads up pioneer! You’ve found yourself in a goldmine. We just sent you an email with more info about Brownstone.” In fact the valuable ore is theirs, in the form of your newly harvested email address.
Turns out that even in the turbulent COVID economy, Stanford grads have their startup ideas ready to go. Brownstone Shared Housing was founded by James Stallworth (Stanford ’17) and his romantic partner Christina Lennox, who met while working as state auditors. They live in Los Angeles, and Lennox already owns and rents out some California property, although Stallworth adds that he’s a “big fan of the New York area” and usually visits once or twice a year. (They took the ads down from Craigslist last week, moving the information over to Brownstone’s own Website.)
Their big idea is to rent and convert single-family brownstones into homes for up to 30 residents. Each room would be fitted with one to four two-person “pods” — that’s two to eight people per room, depending on square footage. Rent would be between $400 and $600 per person a month, plus utilities. The brownstones would become, for lack of a better term, upscale flophouses, or maybe permanent-residency youth hostels. And for their effort, Stallworth and Lennox could be taking in up to $18,000 a month in revenue per building.
They say they’re not just in it for the money, though. Stallworth says that he wants to help people who owe back rent as a result of pandemic hardship — and the landlords who are owed that rent — by serving as a WeWork–like middleman for apartments. He plans to pay landlords more than market rate to rent their buildings, in part to “incentivize them to take on the additional risk of having so many people in their homes.” In the meantime, he will put so many residents into each house that their aggregate rent payments would be much more than the apartments would normally bring in. Then, Brownstone would take its cut.
Stallworth frames his idea in the murky utopian language of many tech ventures. “If we’re going to make it, the future is shared,” he addresses his pioneers. “It takes a bit of courage to say, ‘I’m going to step into the future, and I’m going to share my living space.’”
Judging by the description and that photo, this entire plan is also probably illegal under New York’s Single Room Occupancy laws, unless the brownstones in question are zoned as SRO hotels. Most zoning in New York limits bedrooms to two adults, and the city’s Housing Maintenance Code requires them to be at least 80 square feet in area, with a window and a minimum width and height of eight feet. When asked, Stallworth isn’t worried about any of this, as he believes that brownstones built before 1929 are exempt from such requirements. “We’ve reasonably cleared that away,” he says. “That’s one of the reasons we’re not launching in a new high-rise building in midtown Manhattan.”
“This thing’s clearly wrong,” says Edward Josephson, director of housing and litigation at Legal Services NYC, although he is quick to add an attorney’s caveat that legal boundaries can be squishy. “You’re not allowed to create illegal rooming houses. Buildings are not supposed to be rented in violation of their certificates of occupancy or I-card.” He says that creating multiple new apartments on a floor that previously contained only one would require obtaining a new certificate of occupancy. Many neighborhoods also restrict the number of families allowed per building, he says, and Brownstone could run afoul of those rules as well. “It’s likely to violate, like, 93 different things, and they will come out on the wrong side of at least one of those.”
“The assertion that all buildings built before April 18, 1929, are exempt from occupancy standards is false,” adds Matthew Main, a CUNY Law instructor and low-income housing advocate. “Based on [Stallworth’s] logic, ‘almost all brownstones’ would be exempt from laws that govern lawful occupancy standards in New York City. That is simply not the case.” The section of the law Stallworth cites actually says the opposite, affirming that the two-adult limit applies “irrespective of the date the building was constructed,” according to Main. And Multiple Dwelling Law regulations apply to old buildings if they are altered or converted after 1929. Main offers that Brownstone’s proposal reminds him of the three-quarter houses that cater to people recently released from jails, prisons, detox centers, hospitals, and shelters. They crowd eight people into a room, at $215 per bunk per month, the amount covered by public assistance. They’re often in violation of occupancy standards, Main adds — though he also believes those standards should be relaxed, given that homelessness is often the alternative.
Presented with these potential legal difficulties, Stallworth doubled down on his affordability promise, though it’s unclear how his business math would work out: “Should we be limited to two people in each room, our price of $400 to $600 will not be affected, since we’re committed first and foremost to providing low-cost housing.” As for the rest of the city’s rules, “our understanding was different with regard to occupancy standards. We’ll have to adjust to make sure any contracts that we’re signing are in line with the law.”
Both Main and Josephson also suggest that Brownstone’s rentals would likely qualify for rent stabilization, which applies whether or not apartments are legal. For example, Josephson points to a New York State ruling from 1997 that found that a Bowery flophouse’s tiny “cubicles,” rented by the night, were subject to the protections of rent stabilization. These offer safety from eviction without cause, rent-increase regulations, and continual right to one- or two-year leases.
But back to Stallworth. He explains that, when he was unable to get into university housing toward the end of his time at Stanford, he wrangled free housing by apprenticing as the basement-dwelling manager of a Palo Alto co-living house for a man who rented out bunk-bed spots for $1,000 a month. “I figured I can do something better than that,” Stallworth says. He and Lennox harbor designs of a multi-city fiefdom, but for now, they are focused on Brooklyn, in neighborhoods near Prospect Park. Currently, though, their brownstones are mostly imaginary. The Brooklyn Heights location listed on Craigslist is aspirational and approximate. “We’re still working out agreements with landlords, so no properties yet,” Stallworth says.
And indeed the four-sectioned room appearing in the ad does not exist—or, at least, not in Brooklyn. A reverse image search reveals that the photo is borrowed from an Airbnb page for CoDE Pod Hostel-The CoURT, a converted Victorian courthouse and jail in Edinburgh. Stallworth promises Brownstone’s pods will be slightly larger, with a built-in fan and different lighting. He also says that the capsule beds he’ll use will be different from those he’s seen in the U.S., which he dismisses as colorful, high-tech novelties.
Yes, Brownstone’s capsules are inspired by Japanese capsule hotels—two six-foot-three friends of Stallworth’s spent an “actually kind of comfortable” evening in such slots, he says. But a more foundational influence, he says, is an episode of Master of None, titled “New York, I Love You,” that follows a cabbie who sleeps in a bunk bed in an apartment shared with several other men. (The episode involves a fictitious movie with the tagline: “Everyone is dying to get out.”)
I’ll admit, I signed up before I knew exactly what was going on. An informational email from Brownstone appeared in my inbox with the caveat that the company is “beta-testing our product.” Stallworth put it to me as “starting to figure out that product/market fit,” employing a term popularized by venture capitalist Marc Andreessen that seems to mean “exists and has loyal customers.” Brownstone has yet to find backing, however. What early access have we pioneers been afforded, then, for the price of our email addresses? Upon launch, we’ll be prioritized for a cubby. Stallworth compares this list to Ticketmaster. “One of the reasons it’s important for people to sign up and show that they’re interested is, of course, investors don’t need shared housing,” he says. They’ve collected about 300 email addresses so far.